The outlook for PKI has changed significantly in recent months. Enterprises’ concerns over whether the technology actually serves business needs have forced vendors to reposition the technology. As a result, growth has been far slower than expected – although there is some cause for optimism over the next few years.
Take-up of PKI technology is still low, despite high expectations.
The outlook for public key infrastructure (PKI) technology has changed significantly in the past two years. When PKI was initially promoted, its core benefits of strong authentication, efficient encryption and non-repudiation for communications and transactions were hailed as the solution for secure and trustworthy eBusiness.
Yet as time has passed, vendors have been forced to re-evaluate their product positioning. Indeed, some vendors have even changed their approach, limiting the use of the term PKI in their marketing. Many commentators now view PKI simply as a strong authentication solution.
A number of issues, including a lack of need, difficulties concerning implementation and a belief that the solution is too expensive, have impacted the uptake of PKI. As a consequence its penetration within enterprises is still limited. End-users have told Datamonitor that PKI is a solution looking for a problem, and that they feel vendors are unable to deliver on their promises.
As a result, estimates of PKI growth made during more optimistic times need to be set in the context of current market conditions and enterprise attitudes regarding the technology. Datamonitor has therefore downgraded its estimates of PKI growth made in 2001 – though with strong industry backing, revenues from PKI products and services should still grow at around 30% globally to 2005, by which time global PKI product revenues should hit $490 million.
While growth from 2001 to 2002 will remain limited, with the likes of Unisys and IBM GS promoting the technology, likely increases in IT spend from 2003 and an increasing demand for digital signatures (especially from sectors such as government), PKI revenues should be given some form of renewed vigor.
Several new laws around the world could well make the need for PKI to provide digital signatures significant; this is a major factor that will provide optimism for vendors.
Related research: Datamonitor, 2002: PKI: Re-positioning the product in light of disappointing market revenues (DMTC0750 – available August 2002)
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